Are you taking advantage of trivial benefits?
The trivial benefits in kind (BiK) exemption applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given occasionally to employees. By taking advantage of the exemption employers can simplify the treatment of BiKs whilst at the same time offering a tax efficient way to give small gifts to employees.
Although the benefit is defined as ‘trivial’, employers should remember that this offers a great opportunity to give small rewards and incentives to employees. The main ... read more
How are dividends taxed?
The dividend tax allowance was first introduced back in 2016 and replaced the old dividend tax credit with an annual £5,000 dividend allowance with tax payable on dividends received over this amount. The tax-free dividend allowance was reduced to £2,000 with effect from 6 April 2018 and has remained fixed at that level.
The tax rate for dividends received more than the dividend tax allowance are taxed at:
7.5% for basic rate tax payers
32.5% for higher rate tax payers, and
38.1% for ... read more
Are you a landlord that owes tax to HMRC?
The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding the tax rules or because of deliberate tax evasion. Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.
Landlords who do ... read more
Building a new home and VAT
The VAT DIY Housebuilders scheme is a special scheme that enables someone building their own home to benefit from special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. The scheme has been designed to effectively place DIY housebuilders in a similar VAT position to a property developer.
A claim can be made for qualifying building materials on which VAT has been charged. Qualifying materials include most materials incorporated ... read more
Self-employed NIC charges
There are two types of National Insurance contributions (NICs) payable by the self-employed. These are known as Class 2 NICs and Class 4 NICs.
Class 2 NICs are paid by all self-employed taxpayers unless they earn under the Small Profits Threshold (SPT), currently £6,515, which remove the necessity to pay NICs. Class 2 NICs are currently payable at a flat weekly rate of £3.05 for the current 2021-22 tax year. Class 2 NICs count towards payments such as the basic State Pension, the employment and ... read more
Agent Dedicated Line relaunched
HMRC has confirmed that the Agent Dedicated Line (ADL) that offers priority access to HMRC staff has been relaunched on a trial basis from 14 June 2021.
HMRC has also made it clear that the ADL is not expected to be used to handle certain types of calls where digital services are available or where the pertinent information could have been obtained directly from clients.
The ADL will be available Monday - Friday 8am - 6pm on 0300 200 3311 and calls are anticipated to be answered within 10 ... read more
Tax when you sell a business property
There are various methods at your disposal to reduce or delay the amount of Capital Gains Tax (CGT) when you sell a property that has been used for business purposes.
For example, Business Asset Rollover Relief allows for deferral of CGT on gains made when taxpayers sell or dispose of certain assets (including property) and uses all or part of the proceeds to buy new business assets. The relief means that the tax due on the gain of the property that has been sold is postponed. The amount of the ... read more
Private residence relief
There is usually no Capital Gains Tax (CGT) to be paid when you sell your main family residence (referred to by HMRC as private residence relief) that has been used as your only or main residence.
However, there are important points to consider that can affect your entitlement to full CGT relief. These include the following:
There are special rules for business use of a private residence. Homeowners who work from home do not suffer any restriction to the relief where business ... read more
Changing a company accounting date
There are special rules which limit the ability to change your company’s year end date. A company’s year end date is also known as its ‘accounting reference date’ and is historically set by reference to the date the company was incorporated. Under certain circumstances it is possible to make a change to the year end and for some businesses this can have trading and / or tax benefits.
As a general rule, you can only change the year end for the current or previous financial year. Making a change ... read more
Bed and breakfast – the same day rule
Historically, the term bed and breakfasting (sale and repurchase) of shares referred to transactions where shares were sold and then bought back the next morning. This used to have Capital Gains Tax (CGT) benefits by crystallising a gain or a loss but is no longer tax effective over such a short period. The change to the rule occurred in 1998 when new legislation introduced special share matching rules. Under these rules there are limitations including a 30-day waiting period before the shares ... read more